Investment firm buys Nissan’s stake in Calsonic Kansei, which owns 5 Mexican plants
U.S.-based global investment firm KKR announced it will buy Nissan Motor’s stake in Calsonic Kansei Corp., its biggest supplier, for US$ 1.87 billion. KKR said it plans to make an offer to other stockholders for the remaining shares in February.
KKR beat out rival private equity firms Bain Capital and MBK Partners, which, according to Reuters, had bid to buy Nissan’s stake. Japan’s second-biggest automaker opened the auction to sell the stake in June.
The deal comes as Nissan is seeking to invest in areas such as development of new technologies, including in next generation electric cars and automated driving functions. Nissan also bought a controlling stake in embattled Mitsubishi Motors earlier this year.
Calsonic Kansei, which specializes in traditional auto parts, including interiors, electronics, air conditioning units and compressors, relies for about 80 percent of its global sales on Nissan.
The company owns five production sites in Mexico. Three facilities in Aguascalientes fabricate Air-Conditioning Systems, Heat Exchange Systems, Exhaust Systems, Meters, Plastic Components, Instrument Panels and Wiring Harness Components.
A unit in Durango manufactures Heater Units, Air-Conditioning System Parts and Radiators, and a plant in Mexico City creates Mufflers (Silencers).
KKR said it would help Calsonic expand internationally amid a shrinking home market for the Japanese company.
“As a partner to Calsonic Kansei’s management team, we aim to assist the company in achieving its growth ambitions and make available our international network and industry expertise to continue Calsonic Kansei’s success globally,” Hiro Hirano, head of KKR Japan, said in a statement.
Some private equity firms that did not bid to buy Calsonic had concerns about its excessive reliance on Nissan for revenue, and limited growth potential for the auto parts it makes, according to sources. But as more Japanese automakers dismantle their supplier groups, Calsonic has been trying to grow its client baseaway from Nissan. It now counts Renault — which owns 44 percent of Nissan — Isuzu Motors and other automakers as clients.
In Japan, KKR has done some sizeable deals. These include the 2013 purchase of Panasonic Healthcare from Panasonic in a deal worth US$ 1.67 billion and the acquisition of Pioneer DJ from Pioneer Corp. in 2014 for US$ 550 million.